Nearly half of all US foreign assistance is linked to US strategic and foreign policy goals. Some is in the form of economic assistance, provided to countries with which the United States has important political relationships. The remainder is security assistance in the form of weapons, services, and training for countries of strategic importance to US national security policy. The State Department is responsible for setting policies for these programs, choosing the recipient countries, and planning the budgets. Other agencies, notably the US Agency for International Development (USAID) and the Department of Defense (DOD) play a major role in their implementation. USAID’s role in implementing policy-driven foreign economic assistance has created an internal tension between its development mission and its policy-driven responsibilities, as noted in Chapter 3. The growing role of DOD in providing security and economic assistance has created institutional friction between State and DOD, as discussed below. This chapter reviews these programs. The largest economic assistance program linked to US national security goals is the Economic Support Fund (ESF), but the United States also provides significant policy-driven assistance through separate programs for Eastern Europe and the former Soviet Union, to support democracy, stem the flow of narcotics and combat international crime, confront terrorism, prevent the proliferation of nuclear and other weapons of mass destruction, and remove landmines. Budgets in this category rise and fall in response to major international events and changes in US interests, though funds focused on the Middle East have been consistently high over recent decades. Funding for such economic assistance accounts for roughly 23 percent of overall US foreign assistance.1 Security assistance includes a long-standing portfolio of State Department accounts that support foreign militaries; help them purchase US defense equipment, services, and training; finance education for foreign officers in the United States; and provide training for peacekeeping operations. These traditional security assistance programs constitute roughly another 14 percent of

US foreign assistance.2 Since 2001, the Defense Department has developed a sizeable portfolio of security assistance programs under its own authorities, which parallel some of the State Department accounts. We discuss both sets of programs in this chapter.